Adam Travis: Well, thanks for asking, James. You know, Colorado is the largest junior explorer and land holder in the Golden Triangle. Maybe some of your listeners are hearing about the Golden Triangle for the first time these days, but…

James West: Planes disappear in Bermuda?

Adam Travis: Yeah, the Golden Triangle is an area, for those that don’t know, it’s in northwestern British Columbia near the Alaska Panhandle, and it’s been an area with some pretty spectacular geology and resources. I first started working there almost 30 years ago myself, and some of my directors actually started working there 50 years ago. I like to say that the geology and mineralization has been good for about 100 million years, but it’s only in the last couple years the government and industry and some mining companies put about $2 billion of infrastructure up north. So that’s been a game-changer: now you can have power, roads, access, which has made it incredibly, a lot easier to work up there now these days.

James West: Sure. You’ve got a collection of properties up there; why don’t you detail them in order of priority, starting with your flagship property?

Adam Travis: We do have five projects up in the Golden Triangle area. I would say our flagship property now is something we call our KSP property, and that stands for Khyber Sericite Pyramid. The reason why we named it that three years ago is that it shared some geological similarities to the KSM camp that Seabridge is working on, and their neighbour Pretium. For your listeners there, I’m sure you’ve heard of these two companies, Pretium’s about a $1 billion market cap company developing the Valley of Kings deposit, quarter backed by Bob Quartermain, of course, and they’re building a $700 million mine that’s looking to produce about 10 million ounces of gold over the next 20 years.

Seabridge is also a large company, about a $1 billion market cap as well, and they’ve spent about $150 million up north in the same neighbourhood as us, and they have one of the top three endowments of gold and copper in the world. So certainly elephant country.

Then you know, with our experience as a small junior and being there for, like I say, 30-odd years, we’ve been plugging away in the background about 20 miles to the west of Seabridge and Pretium. And like I said, we had early on suggestions that the geology was similar to the camps that Pretium and Seabridge are in, and that was further confirmed by our getting some good government geologists in there in the last couple of years and I guess I’d say maybe the icing on the cake has been recently, Seabridge coming from their camp and taking out our partner in the ground, further confirming our earlier suspicions that we’re also in elephant country in similar geology.

So when you’ve got a $40 million, $50 million market cap company with the largest land holding of any junior in the area, and Seabridge comes and takes out your partner, I think a lot of people should be paying attention.

James West: Yeah, you bet. Okay, so that’s the KSP. What else?

Adam Travis: Yeah, so that’s the KSP property, and we’re earning in. We used to be earning in with our SnipGold company, now taken over by Seabridge, so we’ve been actively drilling that project, and I would just encourage your listeners to check out our latest news release where we’ve gained some very encouraging results on that one.

The other project that’s quite active is a property called Heart’s Peak, or HP, a little further to the north in the belt. We optioned that property off to Centerra Gold, a major mining company, and they’ve been drilling holes on that one. So it’s been nice to have a major company spending the money on our project.

But thirdly, I would say, in the belt, some people may have remembered us from a couple of years ago where we made a spectacular, brand-new porphery copper gold discovery next to what was Imperial Metals Red Chris Mine, in a camp that had been explored for 40 or 50 years, and lo and behold, we made a brand new discovery just 15 km away from Imperial Metals. We own that one 100 per cent, but during the last few years, nobody was all that interested in a low-grade copper/gold porphery. And we think, talking to private equity groups or gurus in the business, that copper’s days will probably come in the next couple years, but for now we’re focusing on the high grade gold targets at KSP.

James West: Okay. So what’s the near-term sort of catalysts that are going to create news flow, press releases and excitement?

Adam Travis: Well, certainly we continue to drill at the Inel zone at KSP, and just to give you an idea of the scale of things, that project alone is over 300 square kilometres, and we doubled the size of our land position in the area earlier on this year, so we control a belt of rocks that are over 65 km, or more than 40 miles, long by about 10 miles wide. So it’s an entire district up there. We’ll keep plugging away in that area with the drill, and then also countless other targets in the background. So lots of news flow; we’re working hard, and will continue to work hard all summer up there.

James West: Sure. What’s your background and experience in the mining industry?

Adam Travis: Thanks for asking. I’m here at the Sprott conference here in Vancouver. I’m a geologist by background; I went to the University of British Columbia here in Vancouver. I graduated in 1990, so a few years ago I first started working up in this Golden Triangle for Ron Niedzielski and Larry Nagy’s group of companies, and have spent 20 years with those guys, and then spent another five with Hunter Dickinson Group working on large projects. So when times were tough, like they have been in the last few years, my board tells me to get out in the bush with the other geologists and go do good work.

Times get a little bit better like this, able to come in and talk to people like yourself, and then investors attending these conferences.

James West: So you’ve spent a lot of time in that area. You mentioned some of the larger neighbours you’ve got, Pretium and Seabridge; are they actively developing mines presently?

Adam Travis: Oh, for sure. I just came back from up north in the last few days, and we led a tour of a few analysts and the rest of my Board. It’s incredible what’s happening up there. Pretium is putting into production a mine, I believe it’s going to start next year; I think the capital costs of that were around $750 million, so they’re building power lines into the project and they have hundreds and hundreds of workers actively building that mine.

Seabridge is continuing to drill on their KSM project, and as I noted, Seabridge has also just come into the camp right next door to us, and they’re starting exploration there. Other non-mining projects such as AltaGas has just completed late last year another Run-of-River project; that was a $750 million development that put 300 megawatts of power online into the grid. The B.C. government put another almost $1 billion into extending power networks into the area, and of course Imperial Metals’ Red Chris Mine has got their Red Chris Mine up and running; uses about 30 megawatts of power right now. So that’s been running now for about a year. So literally, in the last couple of years, billions and billions of dollars in infrastructure has gone into this area.

James West: So now in the context of the gold price and the costs of mining, you’re in very steep terrain, very remote country. Would this camp be categorized as an expensive cash cost per ounce scenario in terms of the feasibility studies that have been completed, or average, or what?

Adam Travis: I would say it’s average, James, and you can ask some people like Brent Cook who we just had on tour in the last few days up there. He was quite impressed to see that we drive to our property; it is off the old Eskay Creek mining road, and then this extension by AltaGas. Our crews stay at the old construction camp that used to be AltaGas’s so that they basically charge us room and board. So whenever you can drive into an area, that’s a huge cost savings. And where we’re drilling, a 10 minute helicopter ride from the end of the road. So that reduces the costs quite a bit, and one of the things that we’re focusing in on with our targeting at KSP and then, particularly, Inel target zone, is a high-grade underground scenario. So in that country, you pointed out correctly, it’s mountainous, and whenever you’re thinking about a large pit, that might be challenging. But certainly when you go underground, it’s flat. So that’s where we’re focusing. There still is a lot of large, open-pit-type potential, but we’re targeting something that’s more of a Pretium Valley of the Kings underground scenario.

James West: Great. Adam, that’s an awesome introductory overview. I’m going to come back to you after the summer exploration program is over and see how you made out. Thank you very much for joining us today.

Adam Travis: It’s been a pleasure.

James West is an investor and the author of the Midas Letter, an investing research report focused on Canadian markets.The views expressed on this podcast — edited for clarity, brevity and compliance with securities laws — are his own and are presented for general informational purposes only. They should not be construed as advice to invest in any securities mentioned.

James West and/or associated funds do not own shares in any securities mentioned in this article. For the full Midas Letter disclosure policy, click here. Postmedia and Midas Letter have a revenue sharing arrangement.

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